The gig economy is good but invest in education and SMEs

Google.org Foundation is investing $50 million in researching the implications of a gig economy. However, we may have some of the answers from Arusha to Dakar and Cairo to Mbabane.

African countries have been emulating the Gig Economy for a while, what with a prevalence of short-term contracts or freelance work compared with long-term, permanent jobs. In 2015, for example, 12 million young Africans entered the labour force but there were only 3.1 million new jobs. What some see as a solution for employing the other nine million is emulating Silicon Valley and creating technology jobs.

This strategy is a shortcut, however, in a non-existent ecosystem currently designed for agricultural transformation. As such, it is bound to struggle and potentially fail.

Indeed, it is unclear how one million already digitally skilled young people in Africa would transform their aspirations into jobs or creating jobs. Yet, we accept Google’s intention to train 10 million more Africans even though we have a digitally divided and fragmented ecosystem with not enough jobs.

The reality is, the majority of Africans are not thriving in the digital space. What digital forces are engendering is uncertainty, creating an ecosystem that relies on short-term freelance engagement instead of full-time employment. 

Africa’s gig economy has its place and use, but its permanent feature with unskilled, semi-skilled and skilled workers must be resolved. In a gig economy, many people are self-employed, receive pay for limited contracts, some are on zero-hour contracts and seek more than one source of income.

This is problematic because the implicit requirements are a high level of education, excellent language skills and good health. It leaves a majority behind, which is not in line with the Sustainable Development Goals of leaving no one behind.  

Focusing on Africa and its transformation is crucial for the world. By 2050, for example, 33 per cent of the adult population will be over 65 in the OECD and 50 per cent in Japan, Korea and Spain. Yet in Africa, the youth population is expected to continue to grow. How can we ensure they are well-employed?

Research shows that cognitive skills will help young people secure a reliable, steady job in the future, so we must keep this in mind as we train African youth.

Evidence also suggests that future jobs will be in digital design, creation and engineering, requiring us to design schools, train teachers who can impart critical thinking and creativity while accelerating adoption and application of STEM skills.

Right now, however, the pace of reshaping and adopting curricula in Africa is not responding to the need to build and maintain cognitive skills. In rethinking school curricula, beyond the core set of skills, programmes such as art, music or other non-academics are to be maintained and enhanced. 

While this is a pressing issue, our first challenge is to retain Africa’s pupils and youth in school. In Ghana, for instance, less than 10 per cent of those entering basic education proceed to tertiary education.

Of the estimated 700,000 children enrolled at basic level per year, 350,000 joined secondary school, 65,000 pursued high education, 60,000 graduated from tertiary and only 6,000 graduates find a job after one year.

It is the same story across the continent with unemployment hitting 50 per cent of African graduates. While retaining the youth in school is important, the challenge is to design programmes with multiple pathways offering alternatives, to branch out, on the highway to university. Combining skills and strengthening cognitive skills will expand opportunities for the African workforce of the future.  

Investments in SMEs across Africa are also needed to capture more of the youth’s creativity and skills. SMEs drive employment across the world and account for more than half of all formal jobs.

To harness the youth’s potential in Africa, we can learn from Sumitomo and A to Z textile, in Arusha, which has 8,000 employees producing 30 million nets to fight malaria in Africa.

The gig economy is a reality that Africa has been coping with for years. It has its merits but it must be changed so that Africans have the chance to utilise all of their skills and have more steady work opportunities.

Education is one way to overcome the challenge as are investments in SMEs. We must rethink what we accept and how we use it if we truly want to reach this end goal: Africa’s transformation.

Carl Manlan, an economist and a 2016 New Voices Fellow at the Aspen Institute, chief operating officer at the Ecobank Foundation.